January 28, 2013

Dubious Awards Presented at Davos

Only a
stone’s throw from the Davos World Economic Forum meeting, a group
of non-governmental organisations presented the annual Public Eye
Awards this week to Goldman Sachs and Royal Dutch Shell.

Every year in late January, a pilgrimage of a special
kind can be observed in Grisons, Switzerland’s easternmost canton.
Limousine after limousine, SUV after SUV and helicopter after
helicopter head to Davos, the highest city of Europe. At the local
congress centre, the preciously dressed pilgrims unite to renew their
belief in unregulated, free market capitalism and to “improve the
state of the world,” as the World Economic Forum (WEF) proclaims.

This
year, ‘Resilient Dynamism’ is the motto of the global leaders’
gathering. Besides the official programme though, many participants
will use the platform to hold informal meetings. Business and
political interests mingle behind closed doors.

Only a
ten-minute walk from the Davos congress centre, a few dozen people
attended the presentation of the Public Eye Awards, a critical
counterpoint to the WEF since 2000. “On the occasion of the WEF, we
annually put the spotlight on corporations who cause problems,
violate human rights, destroy the environment, act corruptly and push
people into poverty and misery,” says Andreas Missbach on behalf of
the organisers.

In order
to take the wind out of the Public Eye sail and to slightly open up
to the public, the WEF started in 2003 to organise its own counter
event, the Open Forum. Nevertheless, the Public Eye has survived and
this year once again presented two recipients for their ‘awards’.

As a
result of an online voting process, the public award went to the
Anglo-Dutch oil and gas company Royal Dutch Shell. Shell’s search
for oil in the Arctic drew voters’ criticism. “There is no safe
drilling under sea ice conditions, Shell gambles with the wildlife
and beauty of one of the last unspoiled regions on our planet,”
said jury member Andreas Missbach before handing the award over to
Greenpeace executive director Kumi Naidoo.

Naidoo,
whose organisation had nominated shell for the voting, said he didn’t
want the award sitting in his office in Amsterdam. He promised to
find Shell’s CEO Peter Voser at the World Economic Forum to present
him the award.

Greenpeace
is running a major campaign to prevent oil drilling in the Arctic.
Naidoo addressed the Anglo-Dutch company directly: “We as
Greenpeace will come after you peacefully, but aggressively until you
get out of the Arctic.”

Christian
Brütsch, an independent political analyst specialised on energy
issues doubts that Shell can be pressured to disengage from the
Arctic region soon. “The U.S. Geological Survey assumes one-fifth
of the global undiscovered conventional oil and gas resources to be
in the Arctic, and Shell has invested 4.5 billion dollars to prepare
offshore drilling in Alaska so far.”

Brütsch
said that if activists really wanted to prevent the exploitation of
natural resources in the Arctic, they should target consumers.
“Energy companies will only leave the region if the demand for oil
sinks to a level where Arctic adventures would become unprofitable.”

However,
as long as the current situation prevails, Brütsch prefers to see
big energy companies in the Arctic. “Statoil, Exxon Mobil or Shell
are much more capable of financing ‘same season relief wells’
(needed if leaks appear) than smaller corporations.”

Andreas
Missbach stressed that Shell has been the only company so far to win
the Public Eye Award twice. Back in 2005, the multinational was
shamed for its activities in the tropics.

Missbach
said that Shell’s investments in extremely damaging tar-sand
extraction in Canada and the fact that the company had dropped
renewable energy from its long-term strategy had further contributed
to again nominate Shell for the prize.

The
American investment bank Goldman Sachs received the jury award. The
Public Eye jury argued that the company bears a large share of
responsibility for the Euro-crisis.

“Goldman’s
derivative deals, which fudged Greece’s way into the Eurozone,
pawned the future of the Greek people,” said Missbach.

Former
bank regulator and academic William K. Black, who attended the awards
presentation, stressed that Goldman Sachs wasn’t just a singular
rotten apple in a healthy bushel of banks. “Goldman Sachs is the
norm of systemically dangerous institutions,” he said.

Black
blamed the World Economic Forum for spreading the myth that fraud by
corporate elite was rare. “They have pushed deregulation,
de-supervision and de facto decriminalisation.”

Expert on
business ethics Ulrich Thielemann said the dogma of profit
maximisation itself leaves no room for moral integrity. “It’s the
paramount cause for irresponsible corporate behaviour,” he said.
“Ruthless competition that disregards human rights and
environmental standards via non-regulation and the race to the bottom
in standards of good corporate conduct must come to an end.”

Does
naming and shaming companies have any use? Missbach admits that such
an award by itself changes nothing. But within a campaign, he says,
such a shame prize might be a useful tool. “Those organisations who
nominated the award winners may use the prize to attract attention.”

Political
analyst Christian Brütsch is far less convinced about naming and
shaming campaigns. He points out that the names of the decried
companies always remain the same. “Some corporations can afford to
simply ignore criticism,” he says. Others would just increase their
PR budgets, Brütsch argues.

Greenpeace’s
Naidoo regards the awards as a means contributing to reduction of a
company’s relational and reputational capital. He’s sure though
that none of these powerful corporations will react to the criticism.
“However, the failure to respond is a very loud confirmation that
our accusations are true.”